Gambling tax money for Vikings stadium lags badly

Dayton stopped short of saying that lawmakers should reopen the stadium plan and come up with alternative financing.

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By Patrick Condon, Associated Press

Crookston Times - Crookston, MN

By Patrick Condon, Associated Press

Posted Mar. 1, 2013 at 10:00 AM

By Patrick Condon, Associated Press

Posted Mar. 1, 2013 at 10:00 AM

St. Paul, Minn.

Gambling money critical to paying off a new Minnesota Vikings stadium has fallen way short of projections, and more has been spent on the project than has been collected to pay for it, state officials revealed Thursday.

State budget officials released the latest stadium revenue numbers Thursday as part of a larger budget forecast. They said as of Feb. 1, only 130 Minnesota bars and restaurants were offering the electronic pulltab games that are the primary source of tax revenue for the stadium — a far cry from the 900 sites that were initially projected to be up and running by then.

Officials also downgraded the expected daily tax revenue each site will bring in from $206 to $100, and a reserve fund that was supposed to contain nearly $39 million by 2015 is now projected to be empty by then.

"It's not an insurmountable problem, but it is a problem," said Gov. Mark Dayton, who had been the chief booster of a $348 million state subsidy for a $1 billion, downtown Minneapolis stadium scheduled to open in 2016. "We'll be working with legislative leaders to solve it, and we will solve it."

Dayton stopped short of saying that lawmakers should reopen the stadium plan and come up with alternative financing. He said if the state regulatory process can be sped up, the games will soon be available at more locations, which could increase public interest in playing them. State budget officials also delayed the sale of stadium bonds from March to August, pushing back the time by which revenues must be available to start repaying them.

But some state lawmakers said a more aggressive approach might be needed.

"I don't think you want to wait until it's raining to buy an umbrella," said Rep. Joe Atkins, DFL-Inver Grove Heights, chairman of the House Commerce Committee. "Right now there are storm clouds on the e-pulltab front."

Atkins said he's not ready to introduce new legislation, but he has started to feel out colleagues about possible options.

Rep. Ryan Winkler, who openly questioned the original revenue projections during the 2012 session's stadium debate, said no one should be surprised they've fallen short. He pointed out the stadium bill includes backup revenue in the form of a sports-themed lottery and a stadium suite tax.

"I don't think there needs to be a rush to fix this," said Winkler, DFL-Golden Valley.

Sen. Julie Rosen, R-Fairmont, was chief Senate sponsor of the stadium bill. She said the games need better marketing and more time to catch on. The games are offered in bars and restaurants but operated by charitable organizations, leaving questions about who's responsible for trying to promote them.

"I'm not excited about it, but there's no reason to panic yet," Rosen said. She said she thinks the state can afford another year for gambling revenue to grow back toward original projections before backup funding should even be considered; "I really, honestly believe that we're going to be able to turn this around."

Page 2 of 2 - State officials and stadium supporters said the projections flopped so badly for a mixture of reasons. The electronic pull-tab and bingo games authorized in the stadium bill are still rare nationwide, giving Minnesota officials few points of comparison when they drew up projections.

Al Lund, director of Allied Charities of Minnesota, said some gambling operators he represents are loyal to game distributors that don't yet have state authorization to offer electronic games. He said three game manufacturers and seven distributors are still awaiting authorization from the Gambling Control Board to get into the electronic game business, and that along with the expected rollout of electronic bingo games next month should boost lagging tax collections.

"We will show you that we can deliver," Lund said. He said charities don't want lawmakers to try to come up with other gambling or lottery-related funding sources, because it would mean competition for the electronic games that could be a further drag on tax revenues.